A strong US jobs report will almost certainly increase expectations of a Q2 policy tightening

March non-farm payrolls will be the key release this week (Fri), and the ADP survey on Wednesday is the only advance hint on the numbers. The US dollar’s new-found momentum is set for test as markets await US jobs data, any surprise could see a big reaction in bond and FX markets.

Fed funds futures now imply a 38% probability of a 25bp June hike but either a more dovish tone from Yellen or renewed equity market jitters this week could reverse some of the recent build up in Fed tightening expectations.

"We expect the Easter effect to have a negative impact on the headline employment figure. We see the pace of hiring slowing to 180k from 242k in February, a flat unemployment rate at 4.9% and a trend-consistent 0.2% m/m gain in average hourly earnings," said BNP Paribas in a report.